As they approach the 10th anniversary of their formal diplomatic relations next month, diplomatic tensions between the Holy See and Israel are mounting.

Under the terms of the Fundamental Accord, an economic accord was to have been signed by the end of 1995. But the two sides have not yet reached an agreement on the terms of that accord, which could be critical to the survival of the Christian communities in the Holy Land. The accord involves tax-exempt status for Christian congregations and mission facilities.

In July 2003, Israeli foreign-affairs minister Silvan Shalom announced that the economic pact would be concluded within a few months. But one month after that public announcement, Israeli representatives withdrew from active negotiations.

In April of this year, the Israeli ambassador to the Holy See, Oded Ben-Hur, signaled a desire to renew those negotiations in June, with an eye to finalising the pact by the end of 2005 - a full decade later than foreseen in the Fundamental Accord.

Last Tuesday, Ambassador Ben-Hur visited Archbishop Giovanni Lajolo, the Secretary for Relations with States, to make a formal announcement of his government's hopes to conclude the economic pact on the 10th anniversary of diplomatic relations.

At the Vatican, informed officials are viewing the Israeli declaration with caution. "It's a promise-- one more promise," said one official. "We're happy with the promise, but we'll be watching carefully to see if it's followed by action."

A major point of contention between the two sides is Israel's decision to stop renewing the visas of Catholic missionaries in the Holy Land. Hundreds of missionaries are now facing possible expulsion because of the policy, which Church officials see as violating the Israeli promise to cooperate with Church missionary activities.